VW Group agrees to settle Dieselgate scandal in Canada for CAD$2.1 billion

It appears Volkswagen Group might be settling its way out of the so-called “Dieselgate scandal” in Canada – a similar path it has taken in the United States. This comes after the German carmaker agreed to settle nationwide consumer class claims covering 105,000 vehicles powered by its emissions-cheating 2.0-liter diesel engine in Canada.

Canada’s Competition Bureau launched an investigation and found that Volkswagen Canada and Audi Canada did mislead its customers by promoting its vehicles – sold or leased in Canada – as powered by clean diesel engines with lower emission levels even cleaner than their gasoline counterpart. The Bureau found that certain diesel units from Volkswagen and Audi were able to pass applicable emissions tests thanks to installed software that could make it seem that these vehicles were emitting lower emission values during testing.

Owners and lessees of the 105,000 affected vehicles could get cash payments or opt to sell back their units to Volkswagen (buyback) or terminate their lease sans any penalty. Owners and lessees of the affected Volkswagen and Audi vehicles in Canada may opt to keep their units, have these undergo modifications at no extra charge and get an extended emissions warranty. An additional option would be trading in the affected vehicle with the fair market value applied.

However, the class settlement and agreement with Canada’s Commissioner of Competition do not mean an admission of liability by the Volkswagen Group. The class settlement and agreement don’t include proposed class actions currently underway and don’t apply to owners or lessees of 3.0-liter TDI V6 vehicles from Volkswagen and Audi. The class settlement and agreement are still subject to court approval. The Ontario Superior Court of Justice in Toronto and the Superior Court of Quebec in Montreal have scheduled approval hearings for the proposed nationwide class settlement at the end of March 2017.

The settlements may cost the Volkswagen Group up to CAD$2.1 billion (US$1.6 billion), if all eligible class members take part in the settlement program, and if all those eligible for the buyback option decide to sell their vehicles back to the carmaker. In addition, Volkswagen Group would pay a civil administrative monetary penalty amounting to CAD$15 million (US$11.2 million).